France, Britain set stage for EU budget wrangling

Delegates from the Social Democratic Party (PSD) and Centre Democratic Social (CDS-PP) raise to vote during a Parliament session to debate the government's proposal for the 2013 state budget on October 31, 2012 in Lisbon. -- PHOTO: AFP

BRUSSELS/LONDON (REUTERS) - British Prime Minister David Cameron came under pressure to act tough on the European Union (EU) budget and France threatened to use its veto, signalling a divisive start to bargaining over the 1 trillion euro (S$1.58 trillion) long-term spending plan.

Wednesday's warning from Paris echoed similar threats from Denmark and Britain, where Mr Cameron suffered a humiliating defeat in parliament after Conservatives rebelled over Europe, an issue that has long divided his party.

Although the British parliamentary vote is non-binding, rebel Conservatives said Mr Cameron should ditch his call for a real terms freeze in EU spending and push for outright cuts.

The French ultimatum was sparked by a proposal to trim farm subsidies - jealously guarded by France as top recipient of such payments - as part of a compromise from the Cypriot EU presidency to cut the 2014-2020 budget by more than 50 billion euros.